Can Boehner sell the GOP on Obama's new fiscal cliff offer?

By Nancy Cook and Chris Frates

December 18, 2012

President Obama has made a key concession in talks over how to avoid the fiscal cliff, offering to accept a critical Republican demand for deeper spending cuts in exchange for raising tax rates on Americans making more than $400,000 a year. Now, it’s up to House Speaker John Boehner to sell his GOP conference on the idea of cutting a deal at a make-or-break meeting on Tuesday.

Boehner will face his members for the first time since a Friday White House meeting where he first floated the idea of allowing tax rates for millionaires to go up.

The speaker’s position is a risky one. Boehner is betting that Republicans will see that it’s better to cut a deal and trade tax hikes for spending cuts than to pass a Senate-like bill that cuts taxes for everybody but the rich and gets no entitlement cuts in return.

At Tuesday's meeting, Boehner will present the new White House offer, and update the members on the status of the cliff talks. The reaction of rank-and-file lawmakers to Boehner’s pitch will go a long way toward determining whether the speaker has the leeway to cut a deal with the president or whether he’ll be forced to scrap the deal-making in favor of a more scaled-back plan that prevents the expiration of the Bush tax cuts from raising taxes on most Americans.

Asked if he would give a a preview of what he would say in the meeting, Boehner told National Journal, “No, I don’t think so.”

The increasing flurry of offers and counter offers flying up and down Pennsylvania Avenue indicates that the two parties are hard at work on a compromise, though both sides were saying on Monday that the wheeling and dealing is far from over.

On Monday night, a source familiar with Obama’s counter offer described it as a good, but by no means, a final offer.

In his latest offer, Obama suggested raising taxes to Clinton-era rates on people making more than $400,000 a year, a concession from the president’s previous position of $250,000 and down from Boehner’s most recent offer to raise tax rates on those making north of $1 million.

Obama is asking for $1.2 trillion in new revenue and coupling it with an equal amount in spending cuts, according to a source familiar with the negotiations.

The major concession on entitlements would be a slower cost-of-living increase for Social Security benefits, a tweak Republicans have long sought.

The White House offer would also permanently extend the alternative minimum tax patch; the so-called doc-fix that stabilizes Medicare reimbursement rates; and tax extenders that give businesses breaks for things like research and development and renewable energy production.

The White House also countered Boehner's offer to extend the debt ceiling for a year by asking for a two-year extension. And Obama's offer includes promises to fast-track comprehensive tax reform.

Boehner argued that Obama’s offer was still seeking more in revenue than in spending cuts.

"Any movement away from the unrealistic offers the president has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced,” Boehner spokesman Michael Steel said in an email. “We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem.”

Boehner’s offer did force Obama to move off his insistence of defining the wealthy as those making more than $250,000 and increase spending cuts. But it remains unclear how much that concession will help Boehner sell the idea to his members Tuesday morning.

On Monday, Boehner’s offer met with skepticism from Republican lawmakers and aides, who privately questioned whether Boehner could convince his colleagues to trade tax hikes for spending cuts. One senior GOP aide said Boehner needs to present a plan that is “saleable” in the House and it’s still unclear whether this is it.

In public, lawmakers were more circumspect, but still signaled that they're anxious to hear the speaker’s explanation.

“I’ve read in the paper, various papers, what the offers have been and looking forward to tomorrow to hear the full details,” Republican Rep. Cory Gardner told National Journal on Monday.

And, no matter what happens, it’s increasingly unlikely that a deal to avert the fiscal cliff will pass before Christmas.

On Monday, Democratic Senate Majority Leader Harry Reid said, if nothing changes, the Senate will have to come back Dec. 26.